Scammers could drain pension savings in 24 hours warns FCA
New analysis as part of the Financial Conduct Authority’s joint ScamSmart campaign reveals that it could take 22 years for a saver to build a pension pot of £82,000 – the average amount victims lost to scams in 2018.
But despite this, many savers could be at risk of falling for scammers tactics within 24 hours.
New research reveals that almost 1 in 4 people (24%) surveyed, admitted to taking 24 hours or less to decide on a pension offer.
Missing scam signs
Worryingly, overconfidence could also lead to savers missing the signs of a scam. Despite nearly two-thirds (63%) saying they are confident making decisions about their pension, the same proportion (63%) would trust someone offering pensions advice out of the blue – one of the main warning signs of a scam.
Further still, the more highly educated the person, the more likely they are to fall for a pension scam.
Those with a university degree are 40% more likely to accept a free pension review from a company they’ve not dealt with before, and 21% more likely to take up the offer of early access to their pension pot. Both common scam tactics.
Pension fraud can be devastating. Victims can be left facing retirement with limited income, and little or no opportunity to build their years of savings back up.
As a result, the regulators are warning savers to get to know the warning signs of a scam, be ScamSmart and always check who they are dealing with before making a decision on their pensions.
Mark Steward, Executive Director of Enforcement and Market Oversight, FCA, said: 'We know many people have big plans for their retirement, whether it’s seeing new places, learning new skills or helping their families out financially.
“Pension scammers destroy those dreams, often forever. So be ScamSmart. Reject unsolicited approaches offering ‘help’ with your pension and get advice from an FCA authorised firm before making big changes to your pension fund. Make sure your lifetime savings stay yours.'
Nicola Parish, Executive Director of Frontline Regulation, TPR, said: 'Pension scammers ruin lives, stealing away decades’ of savings with professional-looking websites, ‘expert’ advice and an easy manner making it tough to spot the fraud.
“But once you sign on the dotted line, often there’s no second chance. Scams can happen to anyone, so before making any decision about your pension, take your time, be ScamSmart and always check who you are dealing with.'
Honey Langcaster-James, psychologist, added: 'Scammers employ clever techniques, such as seeking to establish ‘social similarity’ by faking empathy and a friendly rapport with their victims.
“They can win your trust in a short space of time and by engaging with them you leave yourself vulnerable to losing a lot of money very quickly.
“People need to know how to spot the signs of a scam so they don’t fall for psychological tricks.'